Residual Risk

The risk that remains after controls have been implemented to mitigate inherent risk. Residual risk represents the actual exposure that an organization faces after accounting for its risk management efforts. In RBPM, residual risk is assessed against risk appetite to determine whether additional controls are needed or whether existing controls can be relaxed. Effective risk management involves optimizing control investments to achieve appropriate residual risk levels rather than minimizing all risks regardless of cost.

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Risk Appetite

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Reputational Risk